From: Sam Norton (elizaphanian@kohath.wanadoo.co.uk)
Date: Tue May 17 2005 - 11:29:23 BST
Hi Mark,
First a revision from when I split the thread into three components, which
were:
1. whether Ayn Rand is 'selfish' in her ideology, or whether objectivism is
in fact closely related to Gewirth etc;
2. what capitalism is; and
3. the notion of a fully-realised human being (FRH) and how that functions
within an understanding of the world.
I haven't done anything on 3 yet, although some of the replies to what you
have written will shift from 1 to 3. This one is thread 2, what is
capitalism? I'm happy to let go of de Soto's research for the time being,
because until either a) you read it for yourself, or b) I can convince you
that your understanding of capitalism is partial and/or incoherent, I think
you will continue to dismiss him as a lackey for corporate interests etc. So
on with the discussion.
> I'm not sure why I need to state my understanding of Capitalism, as
> it is derived from Adam Smith and Karl Marx, but anything to make you
> happy:
Because people interpret both Smith and Marx in very different ways; because
some would say that the understanding of capitalism has changed over time;
and because we need to link in the understanding of capitalism with the MoQ
(as I have done with the description of de Soto).
> Capitalism is a socio-economic system in which the means of
> production of essential goods and services are privately owned and
> managed by individuals or small groups. <snip> To use De Soto's lake
> analogy, the capitalist scenario is one in
> which the lake and hydroelectric plant are privately owned and the
> power thus generated is sold for more than its creation cost.
> This "excess value" is then pocketed by the owners.
> A non-capitalist alternative would be community ownership of the lake
> and plant with the produced power sold to consumers at cost. Another
> non-capitalist alternative would be community ownership of the land
> and lake, with private development of the plant at private expense,
> including fair rent paid to the landowners. As the private
> developers would in this case have a monopoly over the production of
> an essential service, the consumers of the service would determine
> the fair profit due the developers.
Well, to nobody's surprise, we have different understandings of what
capitalism is. In my understanding of capitalism, all of the above options
are capitalist, in so far as there is a conceptual embodiment of physical
resources (ie an extension into the fourth level of the MoQ, allowing the
conceptual embodiments to go off on purposes of their own). I note that you
haven't tried to link in your understanding of capitalism with the MoQ.
Would you be happy to accept the following as a summary of your position:
capitalism refers to the control of economic resources by single
individuals, or, rarely, by a small number of such individuals acting in
concert?
If so, it seems to me that the heart of the description rests with the
question of _control_, and is not an economic description as such. In other
words, it doesn't engage with economic questions, only with political
questions.
In contrast to this, I see de Soto's analysis as being wholly economic, and
not particularly political (obviously there is some overlap, but there is
also just as obviously an emphasis). But this leads in to your further
discussion:
> msh before:
> The question I'm hoping you'll ask yourself here is, if all de Soto
> cares about is making sure that the title of the land is established
> by law, so that the potential of it can be fixed, then why not opt
> for common ownership of land via the State? Very simple, very easy
> to administer. Then all those entrepreneurs who want to use their
> genius to derive profit from the common lands need only pay fair rent
> to the common owners.
> See, I think all his talk about establishing clear title by law, is
> really about securing private property rights for existing
> landholders, while ignoring the moral dimensions of land ownership in
> the first place.
> ... it's the FIRST sentence above that you need to answer. If De
> Soto really does have at heart the best interest of the poor, why
> would he advocate a system that requires private rather than
> community ownership of land and resources? The vast majority of
> people in so-called third-world countries don't own land.
Well, as I said before, de Soto is NOT advocating a system that requires
private rather than community ownership. He is advocating a system that
transposes the enforcement of ownership from social customs and physical
power (levels 3 and 2 of the MoQ) onto the conceptual level 4. So community
ownership of the HEP and lake is just as capitalist as private ownership of
the HEP and lake, according to de Soto's analysis.
There is here, though, the issue about individual rights. Your analysis
seems to give all political control to the group. I'm not sure how that
allows any transcending of level 3 (leaving aside the wider questions).
> sam:
> De Soto's principal concern is that those activities of the poor
> which are outside the capitalist framework are vulnerable to
> predation by those with physical power. So for example, he runs
> through various countries (Peru, Philippines, Egypt) describing the
> economic size of the assets OF THE POOR and argues...
>
> msh:
> This seems counter-intuitive, if not unintelligible. Who are these
> poor people? Are you talking about squatters on public land, or
> trespassers on private land?
<snip>
> As above, what does this mean? How did the poor come by these assets?
> If they have created this vast wealth, what does it mean to call them
> poor? Are these people producing essential goods and services for
> profit, or are they merely self-sustaining?
<snip>
> But, see, all of this suggests that the answer to the problem is to
> simply grant legal title to these once poor people who have, what,
> somehow produced wealth by shall we say extra-legal means?
<snip>
> They are neither the problem nor the solution. They are the
> exception. How did they acquire use of the land? And are their
> efforts self-sustaining or for profit? That is, are they now
> capitalists by the definition given at the start of this post? If
> so, saying they are the solution is saying that capitalism is the
> solution, which is precisely my point re De Soto. Why does he reject
> the alternatives? Unless you can answer that question we really
> won't get far in this discussion.
Well, I'm not allowed to quote de Soto, but if you read the book you will
understand what he is talking about. The 'poor' - ie those who are outside
the bell jar of global capitalism - in fact have a great many economic
resources, which he goes to great lengths to specify and describe. Your
analysis assumes that the poor have no resources. People are 'poor' in so
far as they have nothing which is recognised by the global institutions,
even if they in fact have lots of economic wealth. What de Soto is
describing is a process whereby that wealth can gain a conceptual
representation, shift from the lower levels of the MoQ to level 4, and
thereby become infinitely more productive, to the benefit of them all.
> As I said
> before, still unanswered, this simply ignores the moral dimension of
> private land ownership in the first place. If De Soto doesn't
> address this issue, and simply assumes that private land ownership is
> the best way to go, then he is not so tacitly embracing the
> capitalist model without considering the alternatives.
> So, what textual evidence do you have that De Soto has considered and
> rejected the non-capitalist alternatives I suggested above?
His analysis of capitalism doesn't recognise the distinctions that you draw
as being between 'capitalism' and 'non-capitalism'. It would see the
distinctions you draw as being to do with the political control of such
assets are represented. Your understanding of capitalism, so it seems to me,
is about level 3 issues - which group is going to be in control of the honey
pot, and how is the honey going to be shared? Whereas de Soto is saying that
there is no honey without the transition to a level 4 analysis. Enabling the
creation of the honey is prior to questions of distribution.
> msh says:
> Ok, so the bureaucracy is inefficient. Why? The state is in the
> complicated position of having to monitor the status of private land
> holdings and yet register and otherwise permit use of land for the
> generation of private profit. Things are simplified tremendously if
> all land is held in common, and people who wish to profit from it
> simply pay fair rent to the common landowners.
Or, governments in third world countries can copy the example of the United
States government during the nineteenth century and bring the extra-legal
economy within the bounds of the legal economy, thereby enabling the
transition from lower level economic relationships to the level 4. It was
those actions of the US government during the nineteenth century which
enabled the creation of wealth.
This does - let me hasten ;-) to add - ignore all the questions of
destruction of the indigenous American tribes etc. But as I keep saying,
that is the political issue that remains to be resolved. My point is that
without the conceptual transition from the lower levels to level 4 then
there is no 'capitalism'. There are biological and social level behaviours,
in all their complexity, nothing more.
> msh says:
> But you haven't convinced me that De Soto's sense of capitalism is
> fundamentally different to my own, as stated at the beginning of this
> post. And history reveals that my sense of capitalism results in a
> most inequitable distribution of our earth's common bounty.
Well, I don't think I can explain it any clearer than I did with my original
post. The two analyses seem wholly different to me. Perhaps if you
translated your understanding into the levels of the MoQ we might be able to
tease out the differences more explicitly.
> So, maybe the best way to proceed is for you to try to persuade me
> that I am mistaken in my evaluation of De Soto; but this means
> addressing the primary issue, which is why he thinks private land-
> ownership is necessary for the production of essential goods and
> services.
> I'll let you stew on this, and respond more, later. But, in my later
> responses, I'll assume you understand my notion of capitalism as
> presented above.
Well, I think I understand your notion of capitalism. I've rephrased it in
my own words above ("capitalism refers to the control of economic resources
by single individuals, or, rarely, by a small number of such individuals
acting in concert"). I think that is one of the markers of intelligent and
enlightened discussion - that one side can present the arguments of the
other side in their own words, in ways that the other person would accept.
(You haven't accepted my words yet, but if you object I'll change them until
we get agreement. You might want to include something in there about
'exploitation of resources' but I left that out deliberately).
You might like to return the favour, and try to articulate in your own words
what my understanding of capitalism is. I'm not convinced you've understood
it.
But one last time, I'll repeat the point that de Soto does not think that
private land ownership is necessary. He thinks that LEGAL ownership is
necessary, and that legal ownership can be by private individuals, small
groups, businesses, local cooperatives, trades unions, the nation or the
state - or whoever we can dream up. It is not the _possession_ which is the
issue, it is the conceptual apparatus associated with the abstract
representation of economic resources.
Regards
Sam
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